A rising number of large Australian companies such as Telstra, ANZ, Vodafone and Macquarie Bank are utilising business-process outsourcing companies that are typically located in either India or the Philippines. The lower cost base has enabled companies to increase their operational efficiencies while strengthening margins. Typical activities include inbound and outbound calls, but also an increasing range of more complex services that include accounting, debt collection, software development and media campaigns.
Call centres in the Philippines have sustained considerable growth as Filipinos typically have more of a neutral accent than Indians, partly due to it being a former American colony. This is further boosted a ready-educated workforce in a country of approximately 100 million. The Philippine government has also afforded tax breaks for companies setting up shop to a span of eight years. The outsourcing industry is transitioning beyond call centres into more high value work such as business procurement, information systems and healthcare such as virtual nursing.
Offshoring to low cost countries has spiked among American and Australian firms during the peak of the global financial crisis, as firms aim to reduce costs in light of weak demand. Australian banks and telecommunication companies have spearheaded the offshoring trend around half a decade ago. Small and medium-sized enterprises are closely following suit, as they offshore back-office functions such as bookkeeping, customer service, graphic design and select information systems functions. Although the impact of offshoring translates to redundancies in local shore, it benefits local firms and employees by enabling them to focus on more value-add activities and increase efficiency. Where the internet has enabled a borderless market spanning several continents characterised by fierce competition, the move to increase efficiency and boost competitiveness remain crucial.
Similar to the prominence of social media and the rise of cloud technology, the prevalence of offshoring will increasingly go commonplace to the point that neglecting its presence can leave companies behind. As firms increasingly go global, commercial success is partly contingent on forging collaborative relationships with other regions in the region. For instance, Sydney-based start-up Posse has increased its development capabilities by offshoring select positions. It is similar to Yelp in that it that it links recommendations for food establishments using smartphone geophysical capabilities. Offshoring has enabled the company to operate more efficiently and allow its onshore employees to focus on more value added work. Without question, Australian companies need to continuously evaluate business models and adapt mindsets to boost their competitiveness in the region.